Pensions raised in Belarus
The Decree No 327 envisages recalculation of pensions in August and November 2011, as well as increasing of the amount of social benefits. As a result, on 1 August pensions increase by an average of 13% (up to Br 757 thousand).
On 1 November 2011 pensions will increase by an average of 7.9%. Additional outlays for labor and social pensions as of 1 August will constitute Br 220.6 billion and as of 1 November, Br370.6 billion a month. All in all, implementation of this Decree will require Br 1.4 trillion (USD 280 million at the NBoB exchange rate).
In Belarus between 1 August and 31 October 2011 a monthly minimum consumer budget (MCB) will constitute Br 675,980 (USD136.3 at the NBoB exchange rate). The new MCB will increase by 28.8% compared with May-July.
Currently, the average family MCB is used as a basis for determining the rights of citizens to receive preferential loans and subsidies for housing.
Pension increases will inevitably lead to a new loop of inflation-devaluation. At the moment, price growth is constrained by the purchasing power of people, while prices for “socially important” goods by reducing items in a consumer basket of the poorest.
In anticipation of the autumn rise in prices the authorities try at least somehow compensate the poorest and their declining standards of living. Any increase in income from the budget will conflict with the potential IMF programme or already being implemented anti-crisis programme of the EurAsEc, therefore the authorities are trying to legalize this populist decision in advance.
On the one hand, the growth of the MCB will reduce the amount of claims for preferential housing construction while on the other hand it will inflate the growth of benefits and subsidies.